Focus

Monday, 17 July 2017

Success in the palm of his hands

Where its made: The company operates from its GMP-certified manufacturing facility located in Chemor, Perak.

Where its made: The company operates from its GMP-certified manufacturing facility located in Chemor, Perak.

THERE were a lot of people who said that it was not economically viable to extract phytonutrients or plant-based nutrients from palm oil.

But ExcelVite Sdn Bhd stuck to its guns and managed to prove them all wrong.

“We took the challenge, did research and worked with external parties to extract it.

“People were saying not to waste money because crude palm oil is 99% oil and only about 1% is the health-benefit compound,” says chief executive officer WH Leong.

For the last 80 years, Leong notes that no one thought it was a possible process. And the company’s perseverance has paid off.

ExcelVite has developed a patented advanced Multi-stage Molecular Distillation Extraction Technology that is used in the extraction, purification and concentration of the palm oil phytonutrients. The technology also allows the company to produce high-quality methyl ester and glycerine.

“We also produce bio-diesel during the extraction process, which makes the process economically viable. We applied a patent for the process and scaled it up for mass production,” he adds.

Today, ExcelVite, which specialises in tocotrienols, mixed-carotene, phytosterols and red palm oil concentrate, is the largest producer of tocotrienol and mixed-carotene complex in the world. But Leong credits the success of the company to Hovid Bhd managing director David Ho who threw them the challenge to produce tocotrienol on a commercial scale.

“It was actually his brainchild. There have been plenty of talks on the benefits of tocotrienol but there’s just not enough supply to be studied on.

Essential ingredient: Leong shows some of the products that contain its tocotrienols and other phytonutrients produced from palm oil.
Essential ingredient: Leong shows some of the products that contain its tocotrienols and other phytonutrients produced from palm oil.

“Hovid had then been buying regular tocopherol from other companies and was also importing these from abroad,” Leong explains, adding that only tiny samples could be obtained from the Malaysian Palm Oil Board (MPOB).

According to Ho, Malaysia was sitting on an abundant supply of red palm oil, which is rich with unique phytonutrients. The problem was that little had been done to harvest and extract them.

Hovid provided the stepping stone for the incorporation of ExcelVite, formerly known as Carotech, in 1993 to look into the extraction of palm nutraceutical products.

“I was actually not involved at the start but only came in later in 1993 as a young engineer to scale up the process,” Leong shares.

Once the company was able to supply commercially, ExcelVite started providing other parties with more samples for research.

Meanwhile, Hovid continued to support the company by training them to run a pharmaceutical setup.

The company was restructured and rebranded as ExcelVite in 2015. The name is derived from “Excellent in Vitamin E”, says Leong.

New methods: For a long time, the extraction of palm phytonutrients was not economically viable, says Leong. — Bloomberg
New methods: For a long time, the extraction of palm phytonutrients was not economically viable, says Leong. — Bloomberg

“It was then that the board asked me to take over as the CEO to steer the company forward.

“By then, I had experience in production since 1999 and 16 years of sales worldwide, including the United States and European markets. I was based in the United States for 11 years to promote tocotrienol and mixed-carotene,” he says.

ExcelVite currently supplies phytonutrients to dietary supplement, functional food and cosmetic companies worldwide.

ExcelVite may be a small company in comparison to other plantation giants such as Kuala Lumpur-Kepong Bhd and Sime Darby but Leong says it controls 75% of the global market for tocotrienol.

“Our market includes the US, Europe, Japan, Korea and Australia,” he adds.

As of June this year, ExcelVite has generated a turnover of about RM140mil. Non-phytonutrient chemicals contribute about 60% to its turnover while the rest comes from its phytonutrient products.

Meeting standards

Leong says ExcelVite is the only tocotrienol producer that was inspected by the American Food and Drug Administration (FDA) to allow them to export to and be promoted in the United States.

“We have the FDA’s generally recognised as safe (GRAS) recognition and are also the world’s only Good Manufacturing Practice (GMP)-certified producer of these phytonutrients.

“With the GMP, it gives assurance to the customers that our products are based on standard procedure and the quality is assured, consistent and fit for human consumption,” he adds.

Unlike other major crude palm oil-related companies that mainly operate upstream, ExcelVite focuses on its research efforts.

“To convince people to buy our tocotrienol, we need to give them science and research. That’s how we sustain ourselves, to constantly bring new research to our customers. It is also to solidify ourselves as a leading tocotrienol supplier in the market,” Leong says.

From the lab: Research plays a big part in the company’s operation as Leong believes its products need to be backed by science.
From the lab: Research plays a big part in the company’s operation as Leong believes its products need to be backed by science.

Additionally, Leong believes that ExcelVite’s success also paves the way for other players to penetrate into the United States, European and Japanese markets.

“When we promote to other countries, which also includes South Korea and Australia, we are proud that we are promoting our very own Malaysian palm oil.

“In the United States and certain parts of Europe, they have a negative impression on palm oil, as they think it’s bad for health,” he explains.

“We continue to promote tocotrienol and mixed-carotene, which are palm oil products, telling them that it’s not bad for the health and it has been proven,” he adds.

Facing headwinds

One of the main issues concerning the Malaysian palm oil industry is the anti-palm oil movement and campaigns.

“There have been campaigns noting that the industry is involved in massive forest clearing. We are not denying that there are some unscrupulous companies that burn the forest but prevalently, it is happening in Indonesia but we are caught in it,” says Leong.

“We are calling our palm oil ‘Malaysian palm oil’ to distinguish ourselves from the rest,” he adds.

The palm oil-free movement in Europe is also a danger for the industry, notes Leong, as it could shut down doors to the market.Although Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong is making efforts to confront the matter, Leong cautions that the more companies were to embrace the palm-free movement, the smaller the window of opportunity for players like ExcelVite to penetrate these markets.

“When the door is closed, they don’t want to talk to you no matter how good your products are,” he says.

Another issue that frequently hogs the limelight is the issue of sustainability, particularly among the millenials and youths.

“They are more wary and sophisticated and they ask questions. Back then, if it was a good product, people will just buy it, but now, they will ask why should they be buying it and why are we producing it.

“In Europe and Australia, people talk about sustainability and issues with extinction. It is engrained into their minds so they want to know whether our palm oil comes from sustainable sources,” he says.

By-product: ExcelVite produces bio-diesel during the extraction of its phytonutrients, which makes its processes viable.
By-product: ExcelVite produces bio-diesel during the extraction of its phytonutrients, which makes its processes viable.

Leong says all stakeholders need to address this head on and not brush it aside.

He urges the local palm oil industry to be proactive in addressing the issues rather than be reactive.

“Some companies have gotten comfortable because they are doing well and are getting complacent. They think these issues are just a trend that will go away but they have been there for a while and they are here to stay. Left as they are, the damage will be hard to undo once it is done,” he adds.

The challenges for ExcelVite are not just industry-wide. Leong notes that there are also obstacles to overcome within the company itself, one of them being the efficiency of production cost.

“The main challenge is to continue reducing cost to increase effiency.

“Secondly, we have to ensure that we have continuous science and reseach to drive and enhance the industry. We are blessed to be able to work closely with MPOB as they provide funds for research while we give them products. It’s a synergistic relationship with them,” he adds.

ExcelVite is eyeing plans for an intial public offering within the next three to five years. The exercise would help raise funding for the company to continue its expansion plans and to fund its research efforts to innovate and sustain the business.

“As a company, we cannot just expect a product to last for years. We need to maintain our position as the leading and largest producer of palm oil phytonutrients and to continue to build from it,” he says.

ExcelVite also intends to tap into the pharmaceutical and food markets with its products.

“We are already well positioned in the diet supplementary and cosmetic sector but we have barely touched the pharmaceutical market. We will work closely with Hovid and other US-based companies for this. There is defintely potential there. If we are able to reduce the production cost, we could also look into penetrating the food market,” he says.

“And of course, with bio-diesel, we hope the Government would continue to support the industry by increasing the diesel blend from B7 to B10,” he adds.

ExcelVite was the winner of the Rising Star award at The Star Outstanding Business Awards (SOBA) 2016.

Leong will be giving a talk on ExcelVite’s success in marketing its products globally during the SOBA 2017 Learning Series at Star Media Group’s Ipoh bureau tomorrow.

Related story:

Putting palm oil to work

Tags / Keywords: Excelvite Sdn Bhd , SOBA , Palm Oil , SME

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